Next time you're in front of a large group of people, try this game. Ask people to put up their hands if the are "above average drivers". I pretty much guarantee that 70-90% of hands will go up. Now that's just not credible (unless you're at an advanced drivers convention!).
Or try this one; ask them who thinks they have a better than average sense of humor.... and you'll get the same result.
This is an example of "overconfidence bias" and I suspect the latest PMI Pulse of the Profession results are showing signs of that same overconfidence bias... but first....
The Maturity Gap It seems that, as a general rule, the Profession feels more comfortable with project management than with portfolio management. Only 26% of respondents rate themselves as have a project maturity level below "medium". Ask the same question about portfolio management and 38% self-report themselves to be below "medium".
Put another way,46% more professionals rate their organisation as being weak at portfolio management than at Project management. That's a pretty big difference.
What is Portfolio Management?
For the last 15 years, the industry has been focused on executing projects. The rise and rise of PPM software and project methodologies has transformed project success rates, they seem to have plateaued in the region of the mid-60% mark. More and more PMs are attaining some form of accreditation and the level of knowledge around supporting projects within executive teams is growing (slowly).
Yet portfolio management is a closed book to many.
At its most basic, portfolio management is about deciding which projects you should do given your strategic goals and the resource constraints you have. It's about balancing demand and capacity with a view to delivering maximum value. It's about exercising good governance at the portfolio level.
Some of the core processes in portfolio management include
- demand management
- project prioritization
- portfolio selection
- portfolio planning (coming up with the roadmap)
To do these things well, you also need to be able to estimate the level of effort for each project and to estimate the amount of resource you actually have available to deliver projects and more...
If you've never done it, it sounds scary, but it doesn't have to be.
Addressing Low Portfolio Management Maturity
First, how do you recognise low maturity?. Here are afew signs;
- you are using spreadsheets to capture demand / you don't really know what your pipeline looks like
- you are doing your project schedule/resource plan in spreadsheets
Now, I've chosen to focus on symptoms that involve spreadsheets because, in my experience, that's what most organisations use. There are lots of symptoms I could have talked about (e.g. inability to do "what if planning scenarios"), but most of those symptoms are a result of using the wrong tool; the spreadsheet...
Portfolio management is an area in which tools can make a large difference.Demand managementtools can help streamline the process of collecting and managing data,estimation toolscan help speed up the estimation process while helping you learn how to make your estimates more accurate and (real)project prioritizationtools can really help align projects with your strategy.
Tools vs. Project Management Maturity
My company sells tools, so of course I'm going to say tools are part of the answer (yes , PART of the answer). But here's my view;you CAN do portfolio management in spreadsheets but it's difficult and requires quite a high level of preexisting maturityto make it work.
In contrast,GOOD tools provide scaffolding that supports you and actually helps you raise maturity.... and they can dramatically reduce the amount of time you spend doing administrative tasks.
Good tools let you raise your portfolio management maturity quickly and independently of your projectexecution maturity.
Think of it this way. I play guitar. I started, as most teenagers do, playing a broomstick (and when there was no broomstick available, I would even resort to air guitar!!). Now, you could learn all the fingering, all the chord patterns and scales, by practicing them on a broomstick handle but when I got my hands on my first guitar.... wow, what a difference!
It actually had strings - I didn't have to imagine them. It had frets... so I knew where to put my fingers and I immediately became better. I could hear my mistakes (lots of those).
Good tools are like that. They won't turn you into Jimmi Hendrix over-night, but they will get you making a reasonably pleasant sound really quickly.
And speed is one of the reasons I wanted to highlight portfolio management because raising your portfoliomanagement maturity level is something that can, largely, be done within the PMO.It's mostly within your control.
In the area of project prioritization, for example, the area in which my company has most experience, we've seen amassive impact, with savings into the millions-of-dollars, within 3 weeks.
The point is not to wave our flag (I try not to do that too much in these blogs). Rather, its to make the point thatyou CAN raise portfolio management maturity very quickly, independent of your project delivery maturity, and that the pay-off from doing so is huge.
Coming back to the opening paragraph, I reckon there is some real over-confidence in the self-reported maturity levels when it comes to portfolio management. I reckon that many organisations rate themselves higher than they actually are. Based on what I see at the companies I speak with, the majority of organisations are operating at quite a low level.
So, I recommend taking a long look in the mirror.
If you don't like what you see, go out and talk to some people who have experience (there are some on our partner page) and take a look at the specialist tools that are available out there. We provide a few free tools to help you get started with demand management, project prioritization and portfolio optimisation. Our blog has loads of free advice.
Butget out there and take some action. Then next time someone asks a room full of PMO leaders to put their hand up if they are above average at Portfolio Management, you'll be able to raise you hand... with confidence!